Financial services needs a highly-skilled workforce and higher education institutions are struggling to keep up, especially as persistent technological progress disrupts financial institutions and the markets and societies in which they operate.
At the heart of the problem lies a traditional university system that can only produce a relatively small number of graduates for the sector through programmes that may take three to four years to complete. To compound this, universities are expensive and highly selective, which effectively bars many from getting the training they need.
Professor David Taylor, Director of the African Institute of Financial Markets and Risk Management (AIFMRM) at UCT, is considering the long-term. He doubts that the current structure and cost of a traditional postgraduate degree is either effective or sustainable.
AIFMRM is one of the country’s pre-eminent postgraduate training facilities offering three specialised Master’s degrees that produce roughly 60 highly-skilled graduates for the financial services sector each year. The Institute’s MPhil specialising in Mathematical Finance was recently ranked 59th worldwide, and Taylor says that AIFMRM works closely with industry to ensure that the graduates they are delivering are aligned with industry needs.
“We know that AIFMRM’s offering is excellent for current financial industry needs,” he says, “but as a forward-thinking institution, we need to be contesting the status quo too. Perhaps it is time for industry and educators to assess what will be needed in the future and to find a model that will be affordable, accessible, efficient and sustainable.”
Is a traditional degree sufficient for an exponential world?
Akin to Taylor, Colin Iles, consultant and CxO of the Absa Equinox Leadership Centre, believes the traditional degree system may be too slow to respond to changes in any industry. “Educational content has to be curated in a safe and structured way, with approved credits and standardisation – it is a slow system, and there is a danger of taught-content falling behind what is relevant,” he says.
Iles suggests that some of today’s necessary skills have already deviated from those acquired in a traditional degree programme. He says, “The FinTech movement has given rise to thousands of small entrepreneurial companies trying to solve various problems in unique and differentiated ways. Instead of a comprehensive degree that tries to cover every economic model and mathematical proof, you may become more relevant, quicker, by focusing on what you need to learn for that particular space and time. Then apply your knowledge and learn faster by actually building something in an entrepreneurial environment.”
Iles believes the way forward involves re-defining the purpose of the modern university. “If its purpose is to prepare people to be valuable citizens in the global economy, then the traditional university model, which has been in place for hundreds of years, may be outdated for a world that is exponential.”
He adds that universities could offer more customised, shorter sets of focussed learnings, at scale, online. “Even in complex topics, online learning is proving to be highly effective, with rapid feedback, self-paced learning and class interaction.”
Online education is a rapidly growing field. Class Central, which curates a catalogue of Massive Open Online Courses (MOOCs) recently reported there are currently 11 400 MOOCs provided by over 900 universities, catering to 101 million students worldwide. Business and technology comprise almost 40% of the available courses. There has also been a concurrent increase in online degrees.
Blended and flexible offerings may be the solution
CEO of edX, Anant Agarwal, believes that future-proofing higher education starts with re-inventing the degree. In a recent Quartz series on the future of college, he predicted that employers will soon be searching for what diverse skills people have rather than what degree they possess. So, programmes need to become more flexible.
Agarwal imagines a future where students could, for example, combine humanities skills with tech skills, or analytical skills with design skills – building a degree for a customised skill-set. Smaller, modular credits could combine into a degree from a variety of universities.
“This will be good for higher education institutions. A college or online platform could specialise in certain subjects and offer the components of education their instructors truly excel in. When each university can focus on what it does best, both the educators and the educated will benefit,” says Agarwal.
He also notes that students pursuing on-campus degrees will benefit from this model as they will be able to augment their education with specialised, online modular content from other institutions.
Kumeshnee West, Director of Executive Education at UCT’s Graduate School of Business, agrees that technology can augment face-to-face learning – but not replace it. She advocates a balance of online and classroom learning – especially when it comes to the development of soft skills and emotional intelligence, which are key strengths needed in the workplace of the future according to the WEF Future of Jobs Report 2018.
The rise of life-long learning
Gert Kruger, Chief Risk Officer at Rand Merchant Bank, believes that institutions such as AIFMRM that provide multi-skilled graduates from a variety of academic backgrounds are the first step in keeping pace with what industry needs.
“Also, we need to teach people how to think and how to learn new skills all the time. Possibly teaching more of the soft skills – collaboration, creativity, flexibility and adaptability – may make people adaptable enough to continue learning and re-learning. Organisations need to re-skill people with higher frequency than in the past. Importantly, life-long learning needs to be organisation-wide.”
He adds that the financial industry is continually evolving, but it is challenging to anticipate how organisations – and the skills they require – need to change. However, one thing is clear – “if we do not evolve, we will stagnate. Organisations need to keep abreast of change by making ongoing incremental refinements.”
This is true for universities as well, says Professor Taylor. “Universities are well placed to use their resources and deep expertise to build on what they have, to remain relevant in the future.”
Financial Literacy Key To Business Success – Especially In A Tough Economy
What can South African SMMEs do to position themselves for success in tough economic times? Arming their people with basic financial literacy is a good place to start argues UCT Graduate School of Business Associate Professor Mark Graham.
In times of economic hardship, good financial and management skills in a business can make all the difference. According to a recent article in Business Day, international investors are sniffing about South African SMMEs that have proven themselves to be well-run during this time of subdued economic growth – and are also attractively undervalued.
Strong balance sheets and stable management in an environment of slow growth economy with low liquidity adds up to some bargain long-term investment opportunities for international consortiums it seems. Among those who have been involved in investment or buyout offers in the past few months are Clover and Interwaste.
It seems self-evident to suggest that well-run businesses attract investment and success. But what actually makes a business – of any size – well-run in the first place?
There is obviously no short answer to this; good leadership, a clear strategy and a strong and motivated workforce all play their part, but one factor that is often overlooked is financial acumen – throughout the organisation. While the accountants and members in the finance team are expected to understand the numbers, this is not always a core competency required in other departments. Yet, having a good working knowledge of finance at every decision-making level, from new managers to members of the board, can be key.
Even if people don’t need to know a lot about finance in their day-to-day job, the more conversant they are on the subject, the better off they – and the business – will be, according to Richard Ruback, a professor at Harvard Business School and the co-author of the HBR Guide to Buying a Small Business. “If you can speak the language of money, you will be more successful,” he says simply.
Financial savvy will give the marketing manager the ability to demonstrate not only that something is a good idea/product or service, but that it makes financial sense too, for example. And it will make sure that the people in the HR team understand more clearly why reducing staff churn is a good idea not only for company culture but for the bottom line as well.
A knowledge of some basic financial decision-making tools (the all-important balance-sheet, for example) and an appreciation of the difference between profitability and cash flow will ensure that non-financial managers are more likely to effectively participate in business strategy and decision-making. Someone who understands the financial statements of a business understands the business in a way that is not otherwise possible. It’s like looking beneath the hood of a car and understanding how it all fits together and why the car can move forward – or not.
Such people can more confidently identify potential problems and inefficiencies before they impact the overall financial performance, because those warnings are almost invariably reflected in the financials first – and often at departmental level. Critically, they can also help identify financial irregularities, enabling them to call out and stop fraud and corruption in its tracks.
Equipping its people with financial skills is therefore a good strategy for a business looking to position itself for growth and investment. And it makes sense for individuals too – Joe Knight, a partner and senior consultant at the Business Literacy Institute in the US and the co-author of Financial Intelligence, says that an absence of financial savvy is “career-limiting.”
Let’s not ignore the fact that there are challenges however. Finance matters tend to scare a great many people. Traditionally, these areas of knowledge carry the stigma of being impenetrable, and financial literacy is not ideally developed at early levels. According to a study by the Financial Services Board, South Africa currently has a financial literacy rate of just 51%.
This means that roughly one out of every two people is likely to prefer to abdicate from financial decision-making – leaving it to the “numbers” people. But with some intervention and training it is possible to empower individuals to decode these mysteries and get to grips with the language of finance.
All things being equal, it’s not pure luck that allows some businesses to operate well and thrive while others fail. Well-run businesses are generally run by well-informed people. In short, decision-makers who don’t understand basic financial concepts and the language of finance simply don’t know what is going on.
While the SA government is currently talking up the need for foreign direct investment to rescue the country from the economic doldrums, there is much that ordinary businesses can do to position themselves for success. And ensuring that their people are adequately equipped to understand the nuances of business through the language of finance is perhaps a good place to start.
Trade Agreement Tips That Will Save You Costs
If you are looking to benefit from trade agreements, you need to keep the following advice in mind.
Trade benefits all parties involved. When a country has scarcity of certain resources or lack the capacity to satisfy their own needs, they have the opportunity to trade the resources which they produce in surplus, for the products they need or want.
When goods are transferred from one country to another, it stimulates the economy as products and money is switched between hands. Over the years, the competitive nature of moving goods from one country to the other, negotiating prices and opening new markets has caused certain agreements to immerge to promote trade between the member countries.
A trade agreement is an arrangement between two or more nations in order for goods to move more easily between borders with mutually beneficial tariffs imposed on imports. These agreements ensure that duty tax is removed or reduced on condition that the importer and exporter provide the correct documents. This is all the more reason for traders to familiarise themselves with the current trade agreements in place.
Tip1# Know Whether You Export To Or Import From A Country With A Trade Agreement
There are a few trade agreements that you need to be aware of which will significantly cut duty tax. The Southern Africa Development Community (SADC) Free Trade Agreement (FTA) is one of them. The fifteen SADC member states included in the agreement enjoy an impressive 85% free trade on goods.
Another trade agreement commonly used by South Africans is the South African Customs Union (SACU) which allows duty tax free movements of goods. This means zero duty tax is payable on trade between these countries. Trade agreements with European countries include the SADC-EU Economic Partnership Agreement (EPA) and the SACU European Free Trade Association (EFTA). We have prepared a list of all the trade agreements as well as the countries involved here.
Tip 2# Know Which Certificate Of Origin Is Necessary For The Specific Trade Agreement
Only traders who can prove that goods were produced or processed in a member country may benefit from these agreements. This is why importers and exporters need to submit paperwork attesting that the goods were made in the country listed as the beneficiary of the trade agreement. The proof provided is called a ’Certificate of Origin’.
A certificate of origin often abbreviated to C/O or CoO is a printed form or electronic document completed by the exporter and certified by a recognised issuing body, validating that the goods in a particular export shipment have been produced, manufactured or processed in a particular country.
The exporter has to submit proof that either a) the products were wholly obtained from that country; this means all components and manufacturing originated in that country, or b) that it is sufficiently processed in the country of origin.
In other words, although some components might have been imported, the product was sufficiently transformed, or value was added in such a way that the final item can be deemed as new or original. Furthermore, if a company was registered in one country and the manufacturing plant in another, the certificate of origin would be issued from the manufacturing plant’s country. There are various certificates of origins used for different countries. Read here for more details about the different documents required to ensure you benefit from lower duty tax.
#Tip 3: Ensure The Certificate Of Origin Is Completed In The Right Manner
These documents must be completed correctly. Most of the information provided has to come from the exporter. If the wrong information has been reported, it can influence the relationship between the importer and exporter negatively.
Common mistakes when filling out a Certificate of Origin may include:
- Identifying the wrong country of origin
- Using the wrong H.S. code
- Providing an incorrect or incomplete and rather ambiguous description of the goods
- Not including a description on how the cargo is packed or reporting a total weight that does not include packaging
- Exporting goods made from imported material and not sufficiently processed to be deemed as originating from the exporting country.
A lot of information can be misrepresented on the certificate of origin. For this reason, we recommend making use of companies specialising in trade administration to ease the stress and to ensure that all the t’s are crossed and i’s are dotted.
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The new “Backing You” campaign extends this commitment to support small business owners through the challenges of business ownership – with a little help from Danny DeVito.
“The importance of small business is personal to me. At a young age, I watched both my parents and my sister build their own business from the ground up and struggle to balance family obligations with growing their businesses,” says DeVito.
“When Intuit QuickBooks approached me for this campaign, I felt this was a way that I could give back to this very important industry, show them how to make their lives easier and make them laugh along the way too.”
QuickBooks gives you a set of business tools that’ll do all the hard work for you, making sure you get the time to do what really matters to you. “Because collecting receipts is so 80s, and who has time to chase payments?” says Danny.